Update: Firm backs off claim that Olympics are impacting Netflix

Updated 4:30 p.m. PT August 2: After reporting Tuesday that streaming of the London Olympic Games has resulted in a 25 percent drop in Netflix’s streaming traffic across the internet, ISP technology provider Procera Networks has backed off the claim.

On Thursday, the company reported on its blog that the drop in streaming activity for Netflix last Sunday was merely a “blip,” and that Netflix traffic was back to “normal levels.”

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Procera also sent out a statement to media, explaining that its data covered only the network operators that use its packet inspection technology, and is a not complete U.S. or global sample of Netflix traffic. This was not indicated in Tuesday’s company blog post.

As a Netflix spokesman pointed out to us, another broadband technology vendor, Ontario, Canada-based Sandvine, put out a report earlier in the week noting that Netflix usage was not impacted by Olympics streaming.

Of course, with a segment of the investment community looking for any excuse these days to short Netflix stock, this is the kind of widely reported issue that drives the company’s corporate communications staff nuts. And that’s understandable.

Netflix stock ended the week down nearly 6 percent to $53.91

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Forget Mad Men reruns. The individual mixed dressage events are on tonight!

As predicted by Netflix (s NFLX) CEO Reed Hastings last week, interest in the London Olympic Games seems to be sapping away significant viewership on his streaming service.

“This matches expectations, as the U.S. is much more involved in the Olympics than Canada, and with the peak levels that we mentioned earlier for Olympics streaming, something had to give, and in this case it was Netflix,” wrote Cam Cullen, the Boston-based VP of global marketing for Procera.

Of course, media companies vested in coverage of the Olympics on digital platforms, such as Comcast/NBCUniversal (s CMCSK) and Yahoo, 9s YHOO) are seeing big usage spikes, Procera adds.

“In the U.S., several networks peaked as high as 34 percent of overall bandwidth and increased volume by over 100 percent over the initial two days of events,” Cullen wrote.

Meanwhile, in the U.K., usage on BBC iPlayer was up 100 percent on all platforms Sunday during coverage of soccer events.